Wednesday, April 24, 2019

Eleven Park clears another hurdle

With the 2019 session of the Indiana Legislature drawing to a close in the next week, the status of Senate Bill 7 was going to get resolved one way or another. Fortunately for Pacers and Indy Eleven fans, it didn't die in committee, which I thought was a distinct possibility for the Indy Eleven stadium component nor did it just run out of time. After making its way through the Senate Appropriations Committee, the full Senate, the House Ways and Means Committee, the full House, and then a Motion to Dissent, the Senate voted Tuesday on Senate Bill 7. Here's a quick run-down of its official path through the Legislature:
  1. January 15 - Introduced as SB 7 by Senator Mischler
  2. January 15 - Referred to the Appropriations Committee (Chaired by Senator Mischler)
  3. February 25 - Amended to include language for a soccer stadium that was originally in Senate Bill 543 authored by Senator Sandlin
  4. February 25 - Approved by Appropriations Committee
  5. February 26 - Approved by full Senate
  6. February 27 - Referred to House of Representatives
  7. March 4 - Referred to Ways and Means Committee
  8. April 8 - Approved by Ways and Means Committee
  9. April 11 - Approved by full House
  10. April 12 - Returned to Senate
  11. April 16 - Motion to Dissent filed
  12. April 22 - Motion to Dissent withdrawn
  13. April 22 - Motion to Concur filed
  14. April 23 - Approved by Full Senate

When Senator Mischler filed a Motion to Dissent last week, I really believed that it was because he was never a big fan of having the stadium amendment attached to his original CIB/Pacers bill and voted against it during its initial time in the Senate. During Tuesday's vote in front of the entire Senate, he indicated that he submitted the Motion to Dissent so that he/they could more thoroughly evaluate the changes that the House made before it was placed for a vote in the Senate. Having read the modifications, which included removing the name of a specific hotel from the original bill and the removal of the MLS requirement to be just a "professional soccer league," they were convinced the changes were acceptable and withdrew the Motion to Dissent. From there, things happened quickly. During Tuesday's discussion on the Senate floor, only Senator Michael Young (who serves Guilford and Liberty Townships in Hendricks County and Decatur and portions of Wayne Township in Marion County) expressed anything against the bill. Most of his argument seemed to revolve around the mismanagement of the CIB and how this bill only extends the "temporary" taxes that the CIB were given in 2009. Nobody said anything negative about the inclusion of the stadium. Given the past history with the stadium and the legislature and some folks dislike or mistrust of Ersal Ozdemir, I was surprised at how little of a fight was put against the stadium language in the final voting.

In anticipation of this hurdle being cleared by the team, I reached out for comment from two very important people in Indy Eleven's history; former President and General Manager, Peter Wilt, and former goalkeeper Jon Busch. As I kind of expected, Peter was a bit more verbose on his answers to my questions than Jon, but both took time to answer my questions.

When asked about whether the stadium increases Indy's chances of becoming the 30th MLS team, Jon felt that Indy was still on the outside looking in. Peter disagreed with Jon's assessment stating, "Absolutely. A stadium like this controlled by the team is a prerequisite for an MLS team and there are not many other markets that can offer a soccer centric stadium. There are other factors of course including proper ownership, desirable market, and demonstrated fan and community support." So based on my quick poll, looks like Indy has a 50/50 shot at getting the 30th MLS spot.

Both Jon and Peter were impressed with the renderings of Eleven Park. I asked Peter how he thought the renderings compared to the 2015 "Stadium for Indiana" version and he indicated that the "Eleven Park renderings are spectacular and show a stadium and an overall development that is better than the Stadium For Indiana version. Minnesota United supporter Bruce McGuire recently commented that the best part of Allianz Field is that it is the exception to the rule of stadium renderings, as the end product is better than the renderings. We all hope the same will be true for Eleven Park."

Like Peter, I like the new renderings of the stadium with the development around it, but I did not have the same visceral reaction to the new development that I had to the original "Stadium for Indiana" renderings. The obvious difference is the surrounding development around the new proposed stadium, whereas the last version was a stand-alone stadium. The stand-alone stadium was more striking to me, maybe partially because I know how new apartments in downtown Indy tend to look and I think the Eleven Park renderings will get watered down once it actually goes into design.

I also wonder about whether the inclusion of the offices/apartments overseeing the field will help or hurt the team’s financial assumptions. Originally, I felt that it would hurt the financial assumptions made by the Indy Eleven for the stadium because there would be a potential loss of revenue within the stadium as folks are able to watch from the offices or apartments and eat their own food there rather than through concessions. You're also less likely to get someone to buy merchandise at the stadium if they are watching from their apartment windows. I liken it to the Wrigley Field rooftops, where the Cubs eventually had to work together with them because they were losing money to them. Peter was more pragmatic about it.
"I believe that is a great benefit to the team’s financial assumptions directly and indirectly. Some people potentially can watch the games from their residence or office, but having a captive audience of residents and workers will improve ticket sales by many of those who live and work on site. It will also create a unique environment that will make attending games there more enjoyable for all." - PJW
Now that the legislature has passed Senate Enrolled Act No. 7 and sent it on its way to the Governor, there are still more hurdles to overcome, most notably coordinating with the City of Indianapolis and the City County Council (CCC). A major point of interest in those discussions will be the location of the new stadium. I've said since 2014, when I first starting writing about a potential stadium, that I thought the empty lot southwest of Lucas Oil Stadium could be a fantastic location if it is built within downtown Indianapolis. Some folks know this as the old Valspar paint plant location. I have always referred to it as the Sand Street Stadium site because 1) the maps show an old road running through it called Sand Street, and 2) I like alliteration. See below with Chicago's Toyota Park superimposed on the site.

The old GM Stamping Plant was always in my top 3 locations and is particularly more attractive now over the Sand Street location with the addition of the "transformative neighborhood development that will include a hotel, office, apartments, retail and public areas." All of that "development" would fit better in the GM Stamping location than on Sand Street. However, the new language created in the Act in IC-36-7-31 Sec. 4.(a) states (emphasis mine):
"The tax area may include a facility described in this subsection and any parcel of land on which the facility is located. An area may contain noncontiguous tracts of land within the county. However, the straight line distance between any point in the tax area and the facility described in subdivision (1) may not exceed one (1) mile. The area must be separate from other professional sports development areas established under IC 36-7-31."

That provision to allow the facilities of the development to be "noncontiguous" and to be one mile from the stadium (that's what is meant by "the facility described in subdivision (1)" for those who haven't read the entire bill/act) is significant. It would allow the stadium to be at Sand Street and the development to be somewhere within a one-mile radius. I'm not sure how that will play out as things move forward, but it definitely has the potential for the team to do some creative things with where the development (stadium plus hotels/apartments/retail) are located in relationship to each other. It would seem to imply that the rendering could be nothing more than a pretty picture. This would give the naysayers a lot of gasoline to throw on their hate fire of this bill, so it's incumbent on the team to be true to their word and the vision that they sold to get to this point. A separated stadium and development aren't going to win over any new fans.

For what it's worth, I don't think the discussions about the use of Broad Ripple High School will amount to much as this moves forward. It's more of a gut feeling, but I don't think that is where Mr. Ozdemir and the owners group want it to be located. I often question what advice he is still following of Peter Wilt's, but I do think he is holding fast to that advice. However, Peter sees some advantages to the Broad Ripple location, but recognizes that there are issues too: 
"That is a unique site with good opportunities and challenges as well. It is important to have a site where fans can have activities before and after. Broad Ripple is one of the best locations in Indianapolis for eating and drinking establishments. The new mixed use development will provide more options for fans, too. Ingress, egress, parking and neighborhood security are issues that may be heightened in Broad Ripple, but will need to be addressed regardless of the site." - PJW
Here is the language about how much of the stadium Mr. Ozdemir and the owners group are required, by law, to contribute to the stadium cost, found in IC-36-7-31 Sec. 7.(d), (d)(5), and clarified in Sec. 7.(f).
(d) In addition to the requirements under subsections (a) and (c), covered taxes may not be allocated unless:
(d)(5) "the owner or owner's of the professional soccer team have provided at least twenty percent (20%) of the cost of the project to construct the facility that will be used to host professional sporting events;"
(f) "For purposes of subsection (d)(5), the term "twenty percent (20%) of the cost" means either: (1) an initial contribution made before construction begins equal to twenty percent (20%) of the total capital construction cost of the facility; or (2) a commitment to pay twenty percent (20%) of the annual debt service or least rental payments payable for the facility until the financing obligation for the facility is paid in full."
Much of the media seem to have characterized the financials of the stadium incorrectly, routinely highlighting the $550M value and mostly glossing over the fact that $400M of that is for the surrounding development with the remaining $150M going to the stadium. For those that do make that distinction, the requirement for the owners group to account for 20% of the $150M has rarely, if ever, been mentioned. That is a very important piece that the House of Representatives added and one that satisfies many people's complaints that the owner/team should have some "skin in the game." A $400M development and 20% of the stadium cost are not insignificant values. To me, this is one of the key reasons this version differed from previous iterations. Peter agreed that there were a number of things that the team did this time around that worked to their advantage:
"Indy Eleven did a very good job on several fronts. They took more responsibility for funding than before, they educated the public and legislators better on the funding mechanisms, they remained open to location options and they made clear the mixed use elements to the proposal they packaged it with the Pacers proposal." - PJW
Finally, one of the items that was written into the financial packet that Indy Eleven provided to Indiana Legislators was a chart indicating the anticipated type and number of events to be held at the stadium so that an estimate could be made for ticket sales, concessions, merchandise, etc. One of the line items was a "Pro Women's Team." I would love for there to be an NWSL team to further take my disposal income, but I question whether that is a realistic assumption to make for a number of reasons. While I had Peter, who has started an NWSL team in Chicago, I asked him whether he thought this was realistic. "NWSL has been slow to award expansion franchises, but a new stadium controlled by the team would make Indy a desirable market."  So not a "no," but not quite a "yes" either. I have vague recollections of conversations that Indy has previously approached NWSL about adding a team and that the league was receptive, but the league has been hesitant to expand too quickly. So it's possible that line item could become true, but I don't know if I would have built my feasibility study, that was provided to the Legislature, with it included.

Indy Eleven have cleared another hurdle on their way towards getting their own stadium and I honestly did not expect it to reach this point when the Legislative session began in January. It's a testament to the work that Ersal (and his lobbyists) and the front office have put in to finally get the ball into the net. I believe that getting the language attached to the CIB/Pacers bill ultimately helped the Eleven's cause, but I still had thoughts that the entire stadium amendment could easily get dropped while the rest of the bill passed. Getting the language into the bill that the owners group had to put 20% into the stadium, as well as the development around the stadium are what I believe helped push this bill through. Getting it through the CCC won't be easy, but it should take significantly less time than the 6 years it has taken to get to this point.

Oh, and I wouldn't expect it to be called Eleven Park for very long once the team narrows down the site and gets it constructed. Does Eli Lilly finally become a corporate sponsor?

New forms of speculation can begin now that Indy has cleared the legislative hurdle...

No comments: